Elasticities Of Residential Electricity Demand In Chile

Claudio Agostini, M. Cecilia Plottier and Eduardo Saavedra
Additional contact information
M. Cecilia Plottier: Departament de Economics, Universidad Católica del Uruguay

ILADES-UAH Working Papers from Universidad Alberto Hurtado/School of Economics and Business

Abstract: Since the early 90s, the electricity demand in Chile has been steadily growing, first at an average rate of 8% from 1990 to 2007 and later at an average of 5.7% between 2008 and 2012. In the past, an increase in demand was followed by increases in supply, even though there were some shortage periods mostly due to droughts. During these shortages, consumers were rationed and there were even some blackout periods for some types of consumers. In this context of growing demand and stochastic energy supply in Chile, it becomes necessary to fully understand the determinants of the demand of electricity for household use- price elasticity in particularin order to reduce possible energy deficits through flexible pricing mechanisms. This paper estimates the demand for residential electricity using data from the National Survey of Socioeconomic Characterization (CASEN) 2006, being innovative over previous studies by using disaggregated data per household. The results are consistent with other publications, showing a price elasticity between -0.38 and -0.40 for residential consumption, cross- elasticity between 0.14 and 0.16 with respect to the price of liquefied gas, and an income elasticity of between 0.11 and 0.12, depending on whether it was evaluated on the median or mean of the independent variables. In conclusion, the results show the feasibility of demand management as part of an energy efficiency policy and thus cope with negative shocks of electricity supply in Chile.

Keywords: Electricity; Demand; Households (search for similar items in EconPapers)
JEL-codes: C31 C51 L51 L94 Q41 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2015-12
References: Add references at CitEc
Citations:

Downloads: (external link)
http://fen.uahurtado.cl/wp-content/uploads/2015/05/I-312.pdf (application/pdf)

Related works:
Working Paper: Elasticities of Residential Electricity Demand in Chile (2014)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ila:ilades:inv312

Ordering information: This working paper can be ordered from
economia@uahurtado.cl

Access Statistics for this paper

More papers in ILADES-UAH Working Papers from Universidad Alberto Hurtado/School of Economics and Business Contact information at EDIRC.
Bibliographic data for series maintained by Mauricio Tejada (matejada@uahurtado.cl).